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Anglo American

Anglo American makes expensive bet on hydrogen fuel cell cars – by Barbara Lewis (Business Day – August 18, 2017)

https://www.businesslive.co.za/

London — Anglo American is placing a contrarian bet on hydrogen fuel cell vehicles as it tries to squeeze more profit from its platinum reserves, but risks being left behind as rival miners look to cash in on battery-powered cars.

A push, particularly in Europe and China, for lower-emission transport, raises the prospect of weaker demand for platinum, whose biggest industrial use is in diesel vehicles. Other big miners are positioning themselves for the shift away from the combustion engine by betting on lithium and cobalt, both used in electric vehicle batteries.

Glencore signed a major deal last October to sell 20,000 tons of cobalt products, a hitherto niche material whose production it dominates, while Rio Tinto is sitting on a large deposit of lithium. As the world’s top supplier of platinum, Anglo American is left with little choice but to remain committed to the metal.

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Tanzania’s 55% share of mine revenue ‘pretty generous’ – AngloGold – by Martin Creamer (Mining Weekly.com – August 21, 2017)

http://www.miningweekly.com/

JOHANNESBURG (miningweekly.com) – The share of revenues that the government of Tanzania has received from the Geita gold mine is “pretty generous” when compared with what shareholders have received, AngloGold Ashanti CEO Srinivasan Venkatakrishnan said on Monday when the company reported an adjusted headline loss of $93-million, which includes retrenchment provision of $47-million and a silicosis provision of $46-million.

Since 2000, the Tanzanian government has received 55% of the cash distributed compared with AngloGold’s 45%, with the Geita mine delivering more than $1-billion in royalties, corporate taxes and employees’ income tax since 1999. (Also watch attached Creamer Media video)

“It’s important that we actually get that information out to increase the awareness,” Venkatakrishnan said in response to media questions during a round table attended by Mining Weekly Online. When the time value of money is included, the government’s share is significantly higher.

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Exclusive: AngloGold Ashanti revives plans to spin off South Africa mines – sources – by Zandi Shabalala and Clara Denina (Reuters U.S. – August 18, 2017)

https://www.reuters.com/

JOHANNESBURG/LONDON (Reuters) – AngloGold Ashanti is considering separating its South African assets from the rest of its portfolio, two sources familiar with the matter told Reuters, three years after shareholders revolted against a similar effort.

Africa’s top bullion producer has hired Deutsche Bank to evaluate options but discussions are at an early stage, one of the sources said. AngloGold and Deutsche Bank declined to comment.

The miner is looking at listing its international assets, which include gold mines in Western Australia and Brazil, in London, while the South African assets, some of which will be sold as part of the plan, will remain in the existing Johannesburg listing, the sources added.

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[Anglo American] A Mining Giant Returns From the Dead – by Chris Bryant (Bloomberg News – July 27, 2017)

https://www.bloomberg.com/

To those unfamiliar with Anglo American Plc’s share price collapse in 2015, it might seem strange that a company in control of one-third of global rough diamond production couldn’t spare a dime for shareholders.

On Thursday, chief executive Mark Cutifani tried to turn a page on that dark period of routed commodity markets by reinstating Anglo’s dividend. That’s six months earlier than expected. No question, the payout — 40 percent of underlying earnings — is positive, but it may not be enough to close a large valuation gap with peers.

Management had rightly prioritized cutting debt over dividends in recent months, even after rival Glencore Plc began talking up the potential for a bumper payout. But Anglo’s efforts to trim operating expenses and capital expenditure, together with improved cash flow from rebounding commodities, have put its balance sheet on a much firmer footing.

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ANC’s Mining Charter response ‘very constructive’ – Anglo – by Martin Creamer (MiningWeekly.com – July 27, 2017)

http://www.miningweekly.com/

JOHANNESBURG (miningweekly.com) – The response of South Africa’s ruling African National Congress (ANC) party at its recent policy conference, that further discussion is required on the controversial Mining Charter Three, to ensure that investment and employment levels are not negatively affected, has been described as “very constructive” by Anglo American CEO Mark Cutifani.

Responding to journalists’ questions following Anglo’s posting of strong half-year earnings that hit the $1.5-billion mark and cash flow that soared to $2.7-billion, Cutifani said Anglo was supportive of the legal course of action being followed by the Chamber of Mines, with the ultimate objective being arriving at a solution that was practically implementable and that preserved and enhanced investment in what is a critically important South African industry.

Cutifani cautioned that in the absence of new investment, South Africa would fail to deliver the economic growth required to create greater levels of employment and socioeconomic upliftment for the benefit of all South Africans and reiterated Anglo’s commitment to meeting South Africa’s transformation objectives.

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Anglo American’s New Chairman Has a History of Leading Takeovers – by Thomas Biesheuvel (Bloomberg News – June 7, 2017)

https://www.bloomberg.com/

The century-old mining giant Anglo American Plc named Stuart Chambers as its new chairman less than a year after he steered U.K. chipmaker ARM Holdings Plc through a $32 billion takeover.

Chambers, a former chairman at ARM and Rexam Plc, will join Anglo’s board in September and take over the post in November, the company said in a statement Wednesday. The 61-year-old is replacing John Parker, who said he was standing down earlier this year.

The new chairman will join as Anglo seeks to build on a recovery following a raw-materials downturn that hurt most of the mining industry. The company’s shares slumped to a record low in London in early 2016 on concerns about its debt position. Chief Executive Officer Mark Cutifani announced a plan to radically shrink the company through asset sales, but reversed the strategy this year after recovering commodity prices revived profits.

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Anglo American reports 9 percent rise in output – by Barbara Lewis and Sanjeeban Sarkar (Reuters U.K. – April 24, 2017)

http://uk.reuters.com/

Anglo American (AAL.L) reported a 9 percent rise in overall production for the first quarter of 2017 compared with 2016, but copper output fell 3 percent due to poorer grades and a temporary suspension at the El Soldado mine in Chile.

The miner also said Cyclone Debbie in Australia had led to coal production losses in the last week of March and affected the rail network, which is expected to affect sales volumes in the second quarter.

Anglo was among the miners hardest hit by a slump in commodity prices in 2015 and early 2016. In the depths of the downturn, it said it was narrowing its focus to a group of core, high-value commodities, but after becoming the top performer in Britain’s benchmark FTSE 100 index .FTSE, boosted by a recovery in raw materials prices, it said it would no longer be a forced seller of assets.

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Anglo American to Sell South African Coal Mines to Seriti – by Paul Burkhardt and Loni Prinsloo (Bloomberg News – April 10, 2017)

https://www.bloomberg.com/

Anglo American Plc agreed to sell a group of South African coal mines to black-controlled Seriti Resources Holdings Ltd. for about 2.3 billion rand ($166 million) as it focuses on other commodities.

Seriti, which is led by South African Chamber of Mines President Mike Teke, will buy three thermal coal operations that supply state-owned power utility Eskom Holdings SOC Ltd., as well as four closed collieries, Anglo said in a statement Monday.

The sale, which is expected to close by the end of the year, will make Seriti the second-biggest provider of energy coal to Eskom, supplying almost a quarter of the utility’s current annual requirements.

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Anglo American aims for copper expansion in Peru, but not yet – by Barbara Lewis and Felipe Iturrieta (Reuters U.S. – April 4, 2017)

http://www.reuters.com/

SANTIAGO – Anglo American could begin to expand copper capacity starting in Peru in 2018 after another year without added supplies as the company remains focused on cutting costs, the head of its copper division said in an interview. Copper prices jumped 18 percent in 2016 and have been supported so far this year by strikes and a lack of new capacity.

“All of that has kept the market in almost a neutral position where there wasn’t a surplus,” said Hennie Faul, Anglo American’s chief executive officer for copper. “I couldn’t call it a tight position, but at least it got the prices to stabilize.”

Given a broadly stable copper market and a continued need to shore up the balance sheet following the commodities market crash of 2015 and early 2016, Faul said the company would only look at copper expansion once a decision had been made around year-end on restoring dividends.

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Colombia municipality, home of AngloGold project, votes to ban mining (Reuters U.S. March 27, 2017)

http://www.reuters.com/

Voters in Colombia’s Tolima province have backed a proposal to ban mining projects in their municipality, a result that raises questions about the future of an AngloGold Ashanti gold exploration in the area.

South Africa’s AngloGold may not be permitted to extract gold at its flagship La Colosa mine – a $2 billion potential investment that could yield 28 million ounces of gold – after 98.8 percent voted against allowing mining in Sunday’s referendum.

AngloGold has been exploring at the site in central Colombia for more than a decade. Some 6,165 citizens backed the proposal, while 76 voted against, according to figures from the electoral authority.

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Anglo’s Billionaire Investor Puts Mining on Cusp of M&A Era – by Jesse Riseborough, Dinesh Nair and Thomas Biesheuvel (Bloomberg News – March 17, 2017)

https://www.bloomberg.com/

Anil Agarwal’s surprise move into Anglo American Plc suggests the mining industry may be on the cusp of a new wave of deals.

For years, Anglo has been the subject of takeover speculation and during the worst of the commodities crisis it seemed on the verge of a breakup. It spent last year getting back on firmer footing, but the 2 billion pound ($2.4 billion) investment by one-time Anglo suitor Agarwal has sparked the return of speculation about the company’s future.

“I’m pretty sure every investment banker in London is running around, dusting off old pitch books and going to every major in town,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said by phone. “This feels to me a little like the last cycle, when the first mover precipitated a round of consolidation.”

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Billionaire Agarwal Plans to Buy $2.4 Billion Anglo Stake – by Ruth David, Dinesh Nair and Thomas Biesheuvel (Bloomberg News – March 15, 2017)

https://www.bloomberg.com/

Anil Agarwal, an Indian mining billionaire, plans to buy as much as 2 billion pounds ($2.4 billion) of Anglo American Plc shares in the market after a merger proposal failed last year.

The full stake would equate to about 13 percent of Anglo’s stock, making Agarwal the second-largest shareholder after South Africa’s Public Investment Corp. It will give him a strong voice in the company’s strategy as the blue-chip British mining firm cements its recovery from a slump in commodity prices.

While Agarwal said the purchase was a family investment and he won’t make a takeover bid, the brash Indian tycoon offered to merge part his mining empire with Anglo American last year, only to be rebuffed. The London-based mining group, which is currently looking for a new chairman, is seen as a candidate for a potential break-up through splitting its South African assets from the global mining business.

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South Africa miners face ANC fight over black ownership plans – by Joseph Cotterill (Financial Times – February 25, 2017)

https://www.ft.com/

Johannesburg –  Corporate speeches usually avoid talk of a “difficult and dark” past. But this month Mark Cutifani, head of Anglo American, defended the South African mining industry’s record on opening up ownership to the country’s black majority.

With the government planning to shore up black participation in mining, the next few months are the most critical in the sector’s 150-year history, Mr Cutifani said. Many “still don’t understand” that the modern owners of South African mines are no longer the “Randlords”, he said, referring to the white industrialists who exploited black labour to establish the country as one of the world’s leading miners.

His speech was widely seen as a warning to the ruling African National Congress. Increasingly reliant on populist rhetoric as its support wanes and the economy stagnates, the government wants to consolidate black ownership in an industry that was once the country’s economic bedrock but is now declining.

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De Beers new diamond mine set to reach full commercial production – by Barbara Lewis and Susan Taylor (Reuters U.K. – February 22, 2017)

http://uk.reuters.com/

LONDON/TORONTO – Gahcho Kue diamond mine in Canada’s Northwest Territories is set to reach full commercial production over the next six weeks, the heads of Anglo American (AAL.L) unit De Beers and its Canadian partner Mountain Province Diamonds MPV.TO said on Tuesday.

First diamond production at the Arctic mine, the world’s largest and highest grade new diamond mine, began last year and has been gradually ramping up.

Output will be an average of 4.5 million carats per year over the anticipated 13-year life of the mine in which operator De Beers has a 51 percent stake, with the rest held by Mountain Province Diamonds.

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Miners Enjoy Fastest Comeback in a Decade on Surging Profits – by Kevin Crowley and David Stringer (Bloomberg News – February 21, 2017)

https://www.bloomberg.com/

The speed of the mining recovery is faster than anything that’s been seen in the past decade. BHP Billiton Ltd. and Anglo American Plc on Tuesday reported the biggest profit increases since at least 2007 on deep cost cuts and rebounding metal prices. The earnings exceeded analysts estimates and highlight mining’s dramatic reversal of fortune in the past year.

The industry is coming back from a crisis that forced some of the top metal producers to sell assets, cut costs and rein in spending after years of over-investment. Metal prices have largely recovered from the downturn and several of the biggest mines are profitable, instead of bleeding cash.

“You can see how cash generative this business can be,” Paul Gait, an analyst at Sanford C. Bernstein Ltd. in London, said by phone. “I think 2017 is a year of strategic re-positioning and rethinking.”

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